It is impossible to enjoy idling thoroughly unless one has plenty of work to do. There is no fun in doing nothing when you have nothing to do. Wasting time is merely an occupation then, and a most exhausting one. Idleness, like kisses, to be sweet must be stolen. - Jerome K. Jerome

Saturday, November 01, 2008

Second, there’s the difficulty in getting your money back or even stopping the fraud! With a credit card (and to a lesser extent, a debit card), it’s pretty simple — you call the bank, say you did not authorize a charge, and the credit card company removes the charge. It is then up to them to prove you did make the charge, such as by getting a signed receipt from the merchant and matching your signature. So long as you report the fraud within 30 days, you are not liable — the worst the card company can do to you is to cancel your card (but you still don’t have to pay for the charge you didn’t make.) In theory, you’re liable for up to $50, but almost no card issuers really charge this since it’s terrible customer service (”Sorry you were stolen from! Give us $50!”)

With checks, the money is already gone. If you report a check as fraudulent, there is no federal law saying the bank is liable — it’s up to the bank’s own policies and in some cases a hodgepodge of state laws whether they have to help you at all. The bank may get back to you in 60 to 90 days (during which you don’t have the money, even if it was the entire contents of your checking account.) You have to report the fraud on a paper letter, with a notarized signature, usually by certified mail. What’s more, you have to prove that the checks were not authorized — the burden of proof is on you, not the bank or merchant — and you have to do it to each party from which you’re trying to reclaim money. If a thief wrote bad checks in 20 different jurisdictions, you may be dealing with this for years.

Worse yet, you can’t stop the fraud from taking place. The thief can keep writing checks on your account even after you’ve started reporting them as fraud, and even after you’ve closed the account. Every time the thief writes a bad check on a closed account (the classic practice known as “paperhanging”, a favorite of Frank Abagnale during his criminal youth), your bank will reopen the account and send you an NSF notice. You have to dispute all of these, too. And finally, your account (and possibly your name) will go into ChexSystems (the equivalent of the credit bureaus used to check people’s checking account history) as fraudulent, which will make it difficult or impossible to get new checking accounts for many years. On the bright side, it will make it harder for the thief to open accounts in your name, but that’s little consolation since he can keep using the closed one he already has.